Daijiworld Media Network - Mumbai
Mumbai, Mar 15: The benchmark Nifty 50 closed below the crucial 61.8% Fibonacci retracement level of its previous rally from 21,743 to its all-time high of 26,373, indicating that the market may need more time to form a durable bottom, market analysts said.
Sudeep Shah said the breach of this important retracement level signals a weakening technical structure and suggests that the correction could extend further.
According to him, momentum indicators also confirm a bearish bias, with the weekly Relative Strength Index (RSI) slipping to 30.43 — its lowest level since the COVID-19 market crash.
The recent sell-off on Dalal Street extended into its third consecutive week, as escalating geopolitical tensions between the United States and Iran dampened investor sentiment.
The benchmark index fell more than 5% during the week, marking its steepest weekly decline since June 2022. Automobile and banking stocks were among the biggest contributors to the fall.
Market pressure was also driven by volatility in crude oil prices, which surged above $100 per barrel amid the ongoing geopolitical tensions.
Technically, the Nifty has been in a clear downtrend and has corrected more than 12% over the past 27 trading sessions. Analysts noted that weekly candles with long upper shadows in the past two weeks suggest investors are using every market rebound to book profits and reduce exposure.
Looking ahead, the 22,850–22,800 range is expected to act as the immediate support zone. A decisive break below 22,800 could trigger another round of selling that may push the index towards 22,500. On the upside, the 23,450–23,500 range is likely to act as a key resistance zone where fresh selling may emerge.
The Nifty Bank has also witnessed a sharp correction, declining nearly 7% in the past week and falling around 13% from its recent high of 61,678.
The index has broken below its rising channel on the weekly chart, suggesting a shift from consolidation to a weaker trend.
Analysts said the 53,400–53,200 zone could act as a crucial support level. However, a break below 53,200 may push the index towards 52,500 and potentially 51,800. On the upside, the 54,500–54,600 range is expected to act as a major resistance zone.
Among stocks, Aurobindo Pharma and Coal India are expected to show relative strength in the near term.
Analysts said Aurobindo Pharma has broken its horizontal trendline and is showing strong bullish momentum. The stock is recommended for accumulation in the ?1,290–?1,300 range with a stop-loss at ?1,255 and a potential target of ?1,385.
Similarly, Coal India has broken past the ?455–?460 resistance zone and is supported by strong momentum indicators. The stock may be accumulated in the ?465–?470 range with a stop-loss at ?453 and a potential target of ?500.
Meanwhile, Syngene International continues to face bearish pressure as it remains below key moving averages, while Muthoot Finance has managed to hold above its 200-day exponential moving average zone of ?3,200–?3,250, suggesting the possibility of a short-term rebound if momentum improves.
The Nifty Auto Index has also declined nearly 10% in the past three sessions, with major constituents such as TVS Motor Company, Bajaj Auto, Maruti Suzuki, Mahindra & Mahindra, Eicher Motors and Hero MotoCorp falling below their 200-day EMA levels.
Market experts advised investors to avoid attempting to catch the bottom in the sector and instead wait for signs of stability, such as the RSI moving above 40 or prices sustaining near key support zones.